Urmila Devi & Ors. : Supreme Court clarifies the confusion around Cross-Objections
The case of Urmila Devi & Ors. v. Branch Manager National Insurance Company Ltd. & Ors.[i] has settled the interpretation regarding the permissibility of filing cross-objections under Order 41 Rule 22 of the Code of Civil Procedure, 1908 (“CPC”) for appeals under the Motor Vehicles Act, 1988 (“MVA”). A three-judge bench of the Supreme Court presided by the Chief Justice of India in January 2020 decided this issue and harmoniously construed the provisions under the MVA and the CPC.
In this piece, the author outlines the dispute’s procedural history, examines the merits of the dispute while outlining the contrasting interpretations of different High Courts and concludes by looking at the potential impact of the decision.
The Petitioners filed a Claim Petition against the Respondents under the MVA claiming ₹4,17,500 as compensation. The Learned Additional District Judge, Bhagalpur directed the Respondents to pay ₹2,47,500 along with 6% interest till its realization from the date of the order. Respondents 3 and 4 filed an appeal against the aforementioned judgement of the Additional District Judge, Bhagalpur under Section 173 of the MVA before the Patna High Court challenging their liability to pay, as the driver of the vehicle did not have a valid license at the time of the accident. The Petitioners chose to file cross-objections under Order 41 Rule 22 of the CPC seeking enhancement of compensation from ₹2,47,500 to ₹4,17,500. The High Court dismissed the cross-objection as being non-maintainable.
MERITS BASED ANALYSIS OF THE DISPUTE
Order 41 Rule 22 of the CPC provides a statutory right to a party to assail any adverse finding of the court in relation to a particular issue in the decree by preferring a cross-objection in an appeal filed by the other side. The explanation to Order 41 Rule 22 of the CPC makes it clear that the right to file cross-objection includes the right to file it by merely assailing an adverse finding even though no specific issue was decided against the objector in the decree by the lower court.
The Petitioners were aggrieved by the finding of the High Court in determining the compensation amount in the impugned order of ₹2,47,500 along with 6% interest till its realization from the date of the order. Under the amended CPC, as inserted by the 1976 Amendment, a cross-objection may be filed if the decree is entirely in favour of the respondent and all the issues have also been answered in favour of the respondent but there is a finding in the judgment which is not in favour of the respondent. Thus, the Petitioners filed a cross-objection in relation to the quantum of compensation and argued that the Patna High Court erred in holding that the cross-objections were not maintainable.
The Petitioners argued that Section 173 of the MVA grants an aggrieved person the right to appeal against the award of the claims tribunal. Further, Section 173 of the MVA does not place any bar on the Petitioner’s right to cross-object in the said matter as had been argued by the Respondents in the courts below. In this regard, the decision of the Allahabad High Court in the case of The New India Assurance Co. Ltd. v. Smt. Sushma Gupta & Ors.[ii] is especially useful. It was observed by the Allahabad High Court that if under Section 173 of the MVA, the jurisdiction of the court is to adjudicate an appeal, then the same implies and inheres in it the right to decide an objection arising out of the same judgment which is in appeal. Furthermore, the Allahabad High Court observed that a careful perusal of both the provisions viz. Order 41 Rule 22 of CPC and Section 173 of MVA makes it clear that if a claimant is not satisfied by the judgment or decree, he can either prefer an appeal in terms of Section 173 of the MVA or could prefer a cross-objection in terms of Order 41 Rule 22 of the CPC. In this light, it is open to the Petitioner to either seek a remedy under Section 173 of MVA or under Order 41 Rule 22 of CPC since both the remedies are independent of each other.
The Respondents argued that cross-objection can only be in relation to the issue before the Court in main appeal. This argument derives strength from the views of the Madras High Court in United India Insurance v. Thangamathu and Anr.[iii] and the High Court of Himachal Pradesh in Lata v. United India Insurance.[iv] Both these judgments have held that cross-objection filed by claimant for enhancement of compensation in appeal preferred by insurer questioning his liability alone and not quantum, is not maintainable.
It is submitted that this view of the Madras High Court and High Court of Himachal Pradesh, though intuitively appealing, fails judicial scrutiny. A cross-objection does not necessarily have to be in relation to issue before the court in the main appeal. The Supreme Court in Hardevinder Singh v. Paramjit Singh & Ors.[v] has held that a respondent feeling aggrieved by any adverse finding against him is also permitted to file a cross-objection which is really not against any portion of the decree that is appealed against in the main appeal. It was further observed in Hardevinder Singh that, after the 1976 Amendment, if the appeal stands withdrawn or is dismissed for default, the cross-objection taken to a finding by the respondent would still be adjudicated upon merits for which remedy was not available to the respondent, prior to the Amendment. Therefore, cross-objection is to be treated independently on merits.
Useful reference must also be made to the decisions of High Courts on the subject matter. In the case of National Insurance Co. Ltd. v. Smt. Prema & Ors.[vi] and National Insurance Co. v. Mohammed Nizam Ansari [vii], the Karnataka High Court and Jharkhand High Court respectively were of the view that in an appeal preferred by an insurance company challenging only its liability to pay the compensation, the claimant is also entitled to prefer a cross-objection seeking enhancement of compensation. In light of the aforementioned judgements, the arguments of the Respondents can only be made to be rejected. The observations of the different High Courts further fortify the Petitioner’s submission that the cross-objections of the Petitioner in relation to the quantum of compensation must have been treated independently and on merits by the Patna High Court. In this view, the argument of the Respondent that cross-objection should be in relation to the issue before the court in main appeal is untenable.
The object behind enactment of Order 41 Rule 22 of the CPC as has been discussed in the 54th Law Commission Report (at page 296) is that the provision enables the defendant to assail the decree in respect to the findings that are not in their favour by the court below. Further, it is settled law and has been held in the case of Hari Shankar Rastogi v. Sham Manohar & Ors.[viii] that cross-objections have all the trappings of an appeal. Therefore, cross-objections must be treated independently to the main appeal and limiting the scope of cross-objections goes against both the object and the settled law in Hari Shankar. Moreover, if right to cross-object is denied in such cases, it will lead to multiplicity of appeals.
UNDERSTANDING THE COURT’S VERDICT AND ASSESSING THE POTENTIAL IMPACT
The Apex Court relied upon the decision of Municipal Corporation of Delhi & Ors v. International Security & Intelligence Agency Limited [ix] to hold that the right to prefer cross-objection partakes of the right to prefer an appeal. It further held that the entire Order 41 Rule 22 of the CPC would apply to a cross-objection. The Apex Court ultimately upheld the contention of the Petitioner through a conjoint reading of the provisions of Section 173 of the MVA, Rule 249 of Bihar Motor Vehicle Rules, 1992 and Order 41 Rule 22 of the CPC. It noted that these provisions do not limit the right to prefer an appeal by any of the parties.
From this holding, three findings emerge quite clearly. First, that any party that might be aggrieved by any part of the award shall be within its rights to prefer an appeal. Second, a contesting party can support a decree and simultaneously challenge the unfavorable portions via cross-objections to the decree as opposed to a separate appeal. Third, Sub-Rule 4 of Rule 22 of Order 41 provides that the failure of the original appeal would not seal the fate of a cross-objection and the latter must necessarily be decided on its own merits.
There are three significant takeaways from this decision by the Apex Court. First, it has impliedly affirmed the view taken by the Jharkhand High Court and Karnataka High Court while impliedly rejected the view of the Madras High Court and High Court of Himachal Pradesh vis-à-vis the scope of Order 41 Rule 22. This only constitutes implied affirmation and rejection since these decisions have not been discussed in the judgment. Secondly, by holding that cross-objections partake the character of an appeal, this decision ensures that there is no multiplicity of appeals since the same issue can be decided through a single appeal and a single cross-objection as opposed to multiple appeals by affected parties. This aligns with any judicial forum’s idea of managing its case docket and avoiding needless duplication. Lastly, it re-enforces the idea that the mere failure of an original appeal would not mean a rejection of a cross-objection. This will ensure that there is a trend correction when it comes to the practice of filing dummy appeals for the sake of rejection and for securing a seal of judicial approval at the appellate stage. This decision is bound to have far reaching consequences since the parties shall now be aware that cross-objections would be entertained in their own right. This shall ensure that only those appeals are filed in which the appellant genuinely feels that substantial injustice has been caused as opposed to filing appeals merely with a view to secure dismissal and consequently foreclose the opposite party’s right to subsequently challenge the decision.
* Shivam Singh [B.A.LL.B. (Hons) from NLSIU, LLM from Columbia Law School and Visiting Researcher for Sports Law at Harvard Law School] is a Counsel at Chamber 20A. He successfully represented the appellant in this matter. He is grateful to Harpreet Singh Gupta [B.A.LL.B. (Hons) from NLSIU] for his direct assistance while arguing the dispute in the Supreme Court.
[i] 2020 SCC Online SC 104
[ii] (2018) 126 ALR 305 [iii] 2012 (1) TN MAC 186 [iv] 2005 ACJ 857 [v] (2013) 9 SCC 261 [vi] ILR 2002 KAR 2490 [vii] 4 AIR Jhar R 115 [viii] 2005 (3) SCC 761 [ix] (2004) 3 SCC 250